Part 2- Crimes and Torts, Chapter 5: Criminal Law and Procedure, Doc 10

The final segment of the text highlights criminal liabilities related to complex corporate and technology-related offenses, focusing on the Racketeer Influenced and Corrupt Organizations Act (RICO), whistleblowing protections, the SarbanesOxley Act, bribery statutes, and computer crimes, including the application of the Computer Fraud and Abuse Act (CFAA). RICO’s Application in Corporate Crime • • • Definition and Scope: RICO was originally enacted to target organized crime but is often applied in business fraud cases. RICO violations occur when an enterprise participates in a “pattern of racketeering activity” involving at least two acts of crime within ten years, such as fraud or bribery. RICO prosecutions require proving the existence of an “enterprise” with a structure that unites individuals for a common purpose. Association-In-Fact: The Boyle v. United States case clarified that an “association-in-fact” enterprise must have a common purpose, defined relationships among members, and sufficient longevity to carry out its purpose, though it doesn’t need formal hierarchy or extensive structure. This decision upheld RICO's broad reach, dismissing requirements for more sophisticated structures like hierarchical command or unique operational methods. Civil Penalties under RICO: In addition to criminal prosecution, RICO allows civil suits, enabling private parties to seek treble damages for business or property injuries linked to RICO violations. However, RICO's broad language has attracted criticism for potentially enabling overreach against legitimate businesses. Sarbanes-Oxley Act (SOX) • Key Provisions: SOX was enacted to prevent corporate fraud following high-profile scandals. The Act created the Public Company Accounting Oversight Board and established rules to improve corporate governance and accuracy in financial reporting. It also introduced severe penalties for document tampering, enhanced protections for whistleblowers, and increased penalties for mail and wire fraud to 20 years of imprisonment. Bribery Laws and the Foreign Corrupt Practices Act (FCPA) • • Bribery of Public Officials: Both state and federal laws prohibit bribery of public officials to influence decisions for private gain. The FCPA extends these principles globally, making it illegal to bribe foreign officials for business purposes. Penalties and International Agreements: Violations of the FCPA carry penalties of up to $250,000 and five years of imprisonment for individuals, and up to $2 million for corporations. International agreements like the OECD Convention support anti-bribery initiatives by setting similar standards for member nations. Computer Crimes and the Computer Fraud and Abuse Act (CFAA) • • Types of Computer Crimes: Crimes involving computers have expanded from unauthorized access to include data tampering, theft of information, and fraud. In response, states and the federal government enacted laws such as the CFAA to address cybercrimes specifically. Application of CFAA: The CFAA targets unauthorized access and misuse of computer systems with the intent to defraud, as shown in United States v. Nosal. The court ruled that employees exceed “authorized access” when they obtain data in violation of employer-imposed restrictions, provided they act with intent to defraud. The Ninth Circuit emphasized that merely violating internal policies without intent to defraud does not constitute a CFAA violation. Ethics and Whistleblowing • Corporate Whistleblowing: Cases like Enron demonstrate ethical dilemmas in corporate environments where employees may feel compelled to report misconduct. SOX offers legal protections for employees who disclose fraudulent activities, underscoring the significance of whistleblowing in preventing corporate abuses. Overall, these laws and judicial interpretations underscore the challenges in corporate regulation, highlighting how modern legal frameworks address fraud, ethical breaches, and cybercrime in the corporate sphere.